INDICO MOTORS PRIVATE LTD.,JAMSHEDPUR vs. DCIT CIRCLE-1, JAMSHEDPUR

per Schedule 3A of the final accounts of the succeeding entity. We find that

the books of account and statement of accounts were produced before the

Assessing Officer during the course of assessment proceedings u/s.143(3) of

the Act as observed by the Assessing Officer in the assessment order at

page-1. Thus, on the very same accounts, which were produced by the

assessee before the Assessing Officer at the time of original assessment, the

Assessing Officer found that that the W.D.V. of the Shed and building was at

Rs.38,19,496/- as on 27.9.2005 in terms of schedule-IV of the audited final

account, whereas the same block of asset has been taken at an enhanced

figure of Rs.86,29,724/- as on 28.9.2005 as per schedule 3A of the final of

account of the succeeding entity. Thus, no new material came to the

knowledge of the Assessing Officer after passing of the original assessment

order,which showed that income chargeable to tax has escaped assessment.

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Thus, the forming of the reasons to believe that income has escaped

assessment on the very same set of facts, which were before the Assessing

Officer during the course of original assessment amounts to change of

opinion in view of the decision of Hon'ble Supreme Court in the case of

Kelvinator of India Ltd., (supra). The relevant observations of the apex

Court are as under:

"On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the- Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post-lst April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to reassess. But re-assessment has to be based on fulfillment of certain precondition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief."

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of assessment is bad in law and consequently we cancel the reassessment

order u/s.147 of the Act dated 30.11.2011.

grounds on merits have become infructuous and hence, not adjudicated

upon.

Order pronounced in the open court on 23 /05/2018

Sd/- sd/- (PAVAN KUMAR GADALE) (N.S Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER Ranchi; Dated /05 /2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Indico Motors Pvt Ltd., M- 25,(P) & 26 (P) IVth Phase Adityapur Industrial Area, Ghamaria, Jamshedpur 2. The respondent: DCIT, Circle-1, C.H. Area, Jamshedpur 3. The CIT(A), Jamshedpur 4. Pr. CIT, Jamshedpur 5. DR, ITAT, Ranchi BY ORDER, 6. Guard file. //True Copy// SR.PS, ITAT, CAMP AT RANCHI